Thursday, June 30, 2011

I've been travelling over the last couple days, and thus haven't been able to comment yet on the Obama administration's new plan to pass the expanded Trade Adjustment Assistance program that expired in the House earlier this year. I plan to do a lengthy review of the legal substance of the Administration's actual plans, but for now, let's just get caught up on where things stand. President Obama's super-awesome scheme can be summarized as follows:

(1) Enter into bi-partisan talks with a willing dupe member of the GOP leadership in an attempt to iron out a compromise between passing the three pending US FTAs with Korea, Colombia and Panama (which Republicans, many Democrats and supposedly the White House really want) and passing TAA (which Democrats, almost no Republicans, and the White House really want);

(2) Get the dupe member of the GOP leadership to speak publicly about how he supports a scaled-back version of TAA in order to get the FTAs passed.

(3) When the "bi-partisan" talks break down because the dupe member of the GOP leadership can't get the support of the House Speaker or his Senate GOP colleagues, walk away and publicly claim that you'll keep working on a "bi-partisan way forward."

(4) Go golfingunderground for the weekend. Secretly craft legislation which (among other naughty things) attaches mega-TAA to the implementing legislation of the most economically significant agreement, the US-Korea FTA.

(5) Have Senate Finance Chairman Max Baucus (D-MT) boldly and unexpectedly announce the following Tuesday that a "grand bi-partisan bargain" has been reached, and then sit back and praise the deal as a major "breakthrough," even though there hasn't actually been any, you know, actual GOP support for the "bi-partisan" legislation (even from the lone GOP member who was trying to make a deal).

(6) Schedule a hearing on the combined TAA/FTA legislation at 3p on the Thursday before the July 4th Senate recess, knowing that many GOP Senators on the committee will already have left Washington, and that there won't actually be enough time to consider the dozensofamendments that the few attending GOP Senators (and their Democratic colleagues) have submitted.

(7) Expect Senate and House Republicans, including Speaker Boehner (the guy who, you know, controls the House floor schedule), to instantly cave to the administration's demands and agree to move the legislation exactly as the administration has prepared it, despite the fact that they have uniformly and repeatedly stated that they would do no such thing.

Senate Republicans today said discussions with Democrats over three pending free trade agreements have become so "noxious" that they've decided to block them.

A Senate panel planned to have a hearing today to discuss free trade agreements with Panama, Colombia and South Korea -- agreements that have been in the works for years. Republicans support the deals, as does President Obama, but the GOP today blasted Democrats for trying to attach extra spending to the agreements to help workers displaced by free trade.

Republicans are so opposed to the extra spending, they decided to skip today's hearing in order to stall the agreements. Sen. Orrin Hatch of Utah, calling negotiations with the other party "noxious," said that Democrats purposefully scheduled the hearing for this afternoon, when they knew several senators would already be out of town for July 4th.

He called it a "rush job" to jam the agreements through along with the extra spending, so the administration could "appease its political allies."

Republican Sen. John Thune of South Dakota said the free trade agreements should be "slam dunks."

"To leave something like this sitting around for four years that would create jobs... and help us expand and grow the economy, it is inexcusable," he said. The "free trade agreements are being hijacked in order to get spending the administration wants."

President Obama agrees the agreements will help create jobs, but Democrats also want to extend extra spending, first passed in the 2009 stimulus package, for the Trade Adjustment Assistance (TAA) program. Just two days ago, Democrats and Republicans appeared ready to move forward on the agreements.

We’re pleased the President may finally send us the three job-creating trade agreements we’ve requested. But we have long said that TAA – even this scaled-back version – should be dealt with separately from the trade agreements, and that is how we expect to proceed.

Sweet. So we now have a stalemate - an utterly predictable, and totally unnecessary stalemate. As they've said all along, the House and Senate GOP leaders won't budge on a joint TAA/FTA package, and the President apparently values TAA so freakin' much that he's willing to hatch the rube-goldbergian scheme outlined above to ensure its passage. Of course, three economically beneficial US trade agreements - the only things that Republicans and Democrats both actually want - have been put gravely at risk. But what else did the administration expect with such a convoluted plan? There was bound to be a hiccup or three.

Now, politically, this is a win-win situation for the President. If TAA/FTA passes (and it still might), Obama gets a big, fat win over the GOP, the FTAs and mega-TAA. (Budget deficit, schmudget deficit!). If the whole thing collapses, he gets plaudits from anti-trade American labor unions and a likely boost to his sagging re-election campaign. (Sure, American consumers and exporters, and the US economy more broadly, will be screwed, but whatever, man, the campaign coffers will be chock full!)

In this purely cynical sense, the administration's scheme is quite smart. But from any other vantage point, particularly one that most values the FTAs' actual implementation, this is absolute madness.